Moody's downgrades EFSF, European Stability Mechanism

Moody's Ratings agency announced it has downgraded the European Stability Mechanism (ESM) and European Financial Stability Facility (EFSF) from "Aaa" to "Aa1," with negative outlook on each.

The agency stated that the downgrade was applied after after France lost its top grade at Moody’s and Standard and Poor’s this year.

“Moody's downgrade of France reflects the rating agency's view that there has been a marginal diminution in the certainty that the sovereign will fulfil its financial obligations."

"France is the second largest contributor to the two entities' financial resources, as a provider of callable capital in the case of the ESM and as a guarantor country in the case of the EFSF,” the Moody’s communiqué continued.